What Are Guarantor Loans? Here Is What You Need To Know
Guarantor loans are loans that require you to have a guarantor, a person who will guarantee your loan. In case you are unable to repay your loan, the guarantor will repay it. In this article, we are going to talk more about this type of finance and what you should do before applying for one.
Guaranteed loans are for people who have such a low credit score, or have such a thin credit history, they are unable to get a loan from traditional sources. If you search for them online, you will see that there are many lenders for such kind of loans, although they also provide loans that do not require a guarantor at all. Just like non-guaranteed loans, these are personal multi-personal loans that you can use for whatever purpose.
What are the pitfalls for anyone looking to find a guarantor for a loan? Find out by returning to my homepage.
Always Compare Your Options
Whatever you do, do not be content with applying for a loan with the first lender you encounter online. Remember that personal loans are always expensive, even with a guarantor. However, you can always find a lender that offers lower interest rates just by doing a little research. But you do not need to apply for a loan at different websites. There are broker websites out there where you only need to apply for a loan once and several lenders will then respond to you by approving your loan in principle.
Typically Fast Response To Applications
The good thing about it is that you can get a response within ten minutes although it may take up to 24 hours before the money is released to you. Of course, this is entirely dependent on whether or not your guarantor is considered a suitable person. Still, a 24-hour response time is still a quick response time when you compare it to the banks. How much money can you borrow, and what is the interest rate?
We looked at the website of one broker website and found two sets of loan amounts being offered: from 100 to 750 British pounds, and from 500 to 12,000 British pounds. The smaller amounts have a much higher APR or Annual Percentage Rate, which is from 304% to 842%. On the other hand, lenders that offer larger loan amounts have an average APR of 44.9%.
Check out the following link for more information about loan brokers - https://www.moneyadviceservice.org.uk/en/articles/credit-brokers-and-payday-loans
Can You Turn To Your Family First?
If you are like most people, you probably think there’s none in your circle of friends and family who can become a guarantor to your loans. You might want to think about that again because ten percent of people who borrowed loans with a guarantor actually thought they could not find a guarantor.
It’s really a matter of asking many people if they would do the honour of guaranteeing your loan. Of course, nobody wants that kind of financial burden, but if people trust you enough to repay the loan without incident, they would be more than willing to guarantee your loan.
Just make sure that you can repay the loan because late payment can cause you serious financial problems, especially the small loan amounts because interest is charged every day.